Trump’s ties to the Russian mafia go back 3 decades

My Comments: In a political context, my initial reaction to having Trump in the White House was that it was a healthy step in the evolution of these United States.

We’ve been a formidable leader on the world stage for the past 80 plus years. From time to time, it is useful for the status quo to be upended. It gives everyone a chance to re-evaluate the steps we’ve taken to get us where we are and the values we express to have real meaning.

Though I disliked him personally as a person, I decided I could live with the disruption and existential threat he posed if it meant we’d come out the other side stronger and fully committed to moving forward as a society. I still believe that.

But that doesn’t mean I can ignore the chaos and what it all means to us as a nation. My role in the re-evaluation process means I get to have a blog post and express my thoughts as I deem appropriate. This is one of those times…

by Sean Illing \ November 19, 2018

On November 9, 2016, just a few minutes after Donald Trump was elected president of the United States, a man named Vyacheslav Nikonov approached a microphone in the Russian State Duma (their equivalent of the US House of Representatives) and made a very unusual statement.

“Dear friends, respected colleagues!” Nikonov said. “Three minutes ago, Hillary Clinton admitted her defeat in US presidential elections, and a second ago Trump started his speech as an elected president of the United States of America, and I congratulate you on this.”

Nikonov is a leader in the pro-Putin United Russia Party and, incidentally, the grandson of Vyacheslav Molotov — after whom the “Molotov cocktail” was named. His announcement that day was a clear signal that Trump’s victory was, in fact, a victory for Putin’s Russia.

Longtime journalist Craig Unger opens his new book, House of Trump, House of Putin, with this anecdote. The book is an impressive attempt to gather up all the evidence we have of Trump’s numerous connections to the Russian mafia and government and lay it all out in a clear, comprehensive narrative.

The book claims to unpack an “untold story,” but it’s not entirely clear how much of it is new. One of the hardest things to accept about the Trump-Russia saga is how transparent it is. So much of the evidence is hiding in plain sight, and somehow that has made it harder to accept.

But make no mistake: Trump’s ties to shady Russian figures stretch back decades, and Unger diligently pieces them together in one place. Although Unger doesn’t provide any evidence that Trump gave the Russians anything concrete in return for their help, the case he makes for how much potential leverage the Russians had over Trump is pretty damning.

I spoke to Unger about what he learned, how he learned it, and why he thinks Russia’s use of Trump constitutes “one of the greatest intelligence operations in history,” as he puts it in the book.

A lightly edited transcript of our conversation follows.

Sean Illing

I’ll ask you straightforwardly: Do you believe the Russian government successfully targeted and compromised Trump?

Craig Unger

Yes, absolutely. But let’s go back in time, because I think all of this began as a money-laundering operation with the Russian mafia. It’s well known that Trump likes doing business with gangsters, in part because they pay top dollar and loan money when traditional banks won’t, so it was a win-win for both sides.

The key point I want to get across in the book is that the Russian mafia is different than the American mafia, and I think a lot of Americans don’t understand this. In Russia, the mafia is essentially a state actor. When I interviewed Gen. Oleg Kalugin, who is a former head of counterintelligence in the KGB and had been Vladimir Putin’s boss at one point, I asked him about the mafia. He said, “Oh, it’s part of the KGB. It’s part of the Russian government.”

And that’s essential to the whole premise of the book. Trump was working with the Russian mafia for more than 30 years. He was profiting from them. They rescued him. They bailed him out. They took him from being $4 billion in debt to becoming a multibillionaire again, and they fueled his political ambitions, starting more than 30 years ago. This means Trump was in bed with the Kremlin as well, whether he knew it or not.

Sean Illing

Let’s dig into this a bit. You claimed just now, as you do in the book, that the Russian mafia has been using Trump-branded real estate to launder money for over three decades. What evidence do you have to back this up?

Craig Unger

You really have to go back 20 or 30 years to understand who the key Russians were, what role they played in the Russian mafia, and how they related to Trump.

The very first episode that’s been documented, to my knowledge, was in 1984 when David Bogatin — who is a Russian mobster, convicted gasoline bootlegger, and close ally of Semion Mogilevich, a major Russian mob boss — met with Trump in Trump Tower right after it opened. Bogatin came to that meeting prepared to spend $6 million, which is equivalent to about $15 million today.

Bogatin bought five condos from Trump at that meeting. Those condos were later seized by the government, which claimed they were used to launder money for the Russian mob.

“One thing Vladimir Putin got right was his insistence that American democracy is also corrupt, and I think he’s showing us exactly how corrupt it is”

Sean Illing

Okay, to play devil’s advocate, can we say definitively that Trump knew who he was dealing with or what he was getting into? Or did he just naively have his hands out?

Craig Unger

Look, I can’t prove what was in Trump’s head, or what he knew or when he knew it. But I document something like 1,300 transactions of this kind with Russian mobsters. By that, I mean real estate transactions that were all cash purchases made by anonymous shell companies that were quite obviously fronts for criminal money-laundering operations. And this represents a huge chunk of Trump’s real estate activity in the United States, so it’s quite hard to argue that he had no idea what was going on.

Sean Illing

How did Trump first become a “person of interest” to the Russians? Why would they target this fringe celebrity character 30 years ago, long before his ascent to the presidency was even fathomable?

Craig Unger

First of all, the Russians have always wanted to align with certain powerful businessmen, and they have a history going back to the American businessman Armand Hammer in the 1970s and ’80s, whom the Russians allegedly turned into an asset. But it’s not as though they zeroed in on Trump 30 years ago, and only Trump.

Russia had hundreds of agents and assets in the US, and Gen. Kalugin, the former head of KGB operations in Russia, told me that America was a paradise for Russian spies and that they had recruited roughly 300 assets and agents in the United States, and Trump was one of them.

But it’s not just the money laundering. There was a parallel effort to seduce Trump. Sometime in 1986, Russia’s ambassador to the US, Yuri Dubinin, visited Trump in Trump Tower and told him that his building was “fabulous” and that he should build one in Moscow, and they arranged for a trip to Moscow.

According to Gen. Kalugin, that was likely the first step in the process to recruit and compromise Trump. Kalugin told me he would not be surprised in the least if the Russians have compromising materials on Trump’s activities in Moscow, something they were quite good at acquiring.

Sean Illing

But we still don’t have any evidence that such compromising material exists, right? Did you talk to anyone who has seen it or is sure of its existence?

Craig Unger

No, and I won’t say that I’m 100 percent certain that it exists. I spoke to several people who assured me that it exists, but I could not corroborate those accounts. I have no idea if they’re right or if any tapes will ever emerge. But in a way, all of that is beside the point. The real evidence of compromise is already out there, and we’re talking about it now.

Sean Illing

Speaking of which, tell me about Bayrock Group, a real estate company that operated in Trump Tower.

Craig Unger

Bayrock was a real estate development company located on the 24th floor of Trump Tower. The founder was a guy named Tevfik Arif and the managing director was Felix Sater, a man with numerous ties to Russian oligarchs and Russian intelligence. Bayrock proceeded to partner with Trump in 2005 and helped him develop a new business model, which he desperately needed.

Recall that Trump was $4 billion in debt after his Atlantic City casinos went bankrupt. He couldn’t get a bank loan from anywhere in the West, and Bayrock comes in and Trump partners with other people as well, but Bayrock essentially has a new model that says, “You don’t have to raise any money. You don’t have to do any of the real estate development. We just want to franchise your name, we’ll give you 18 to 25 percent royalties, and we’ll effectively do all the work. And if the Trump Organization gets involved in the management of these buildings, they’ll get extra fees for that.”

It was a fabulously lucrative deal for Trump, and the Bayrock associates — Sater in particular — were operating out of Trump Tower and constantly flying back and forth to Russia. And in the book, I detail several channels through which various people at Bayrock have close ties to the Kremlin, and I talk about Sater flying back and forth to Moscow even as late as 2016, hoping to build the Trump Tower there.

Sean Illing

I don’t think you say this explicitly in the book, so I’ll ask you now: Is there any evidence at all that Trump actively sought out Russian money by making clear that his businesses could be used to hide ill-gotten gains?

Craig Unger

That’s a difficult question. I’m not sure he made this crystal clear, and I don’t know that he had to. I mean, just look at how these transactions take place. Trump doesn’t have to say anything. Trump’s organization was desperate for money, they knew the caliber of people they were dealing with, and they were either okay with this or deliberately chose not to do their due diligence.

You might say this is something other real estate developers do as well, and maybe that’s true, but those developers don’t become president of the United States.

Sean Illing

A few minutes ago you referred to Trump as a Russian “asset,” and this circles back to the question of whether Trump was actively working with the Russians or whether he may have just been a useful idiot who didn’t know he’d been potentially compromised.

Craig Unger

In the book, I use this term “asset,” and the difference between an “asset” and an “agent” to me is whether or not the person is knowledgeable. And from my point of view, it’s impossible to prove what was in Trump’s mind. I can’t prove that he was actually knowledgeable. At the same time, if he did this kind of money laundering 1,300 times, it’s reasonable to surmise that he was aware of what was happening.

Sean Illing

Part of what’s so puzzling to me is trying to figure out how money and ideology intersect in all this, if they intersect at all. In other words, Trump seems much more motivated by money than political ideology, but I keep wondering if his drift into politics was in any way influenced by his financial entanglements.

Craig Unger

It’s an important question, and it’s not clear what the answer is. One weird anecdote that jumped out to me was this story about Ivana Trump, whom Donald married in 1977. It turns out the Czech secret police were following her and her family, and there’s a fascinating file I quote in the book that says they started tracking her in the late 1980s, and one of the Czech secret police files says that Trump was being pressured to run for president.

But what does that mean? Who was pressuring him? How were they applying the pressure, and why? And did it have anything to do with potentially compromising materials the Russians had on Trump from his 1987 trip to Russia?

What we do know is that Trump returns from that first trip to Moscow and he takes out full-page ads in the Washington Post, New York Times, and Boston Globe — and it’s fascinating because the ads essentially pushed the same foreign policies that he’s pushing today. They were anti-European, anti-NATO — basically they were aligned with the Soviet plan to destroy the Western alliance. And Trump takes out full-page ads in major American newspapers affirming this view. Maybe that’s just what he always believed. In any case, it’s worth noting.

“Trump was working with the Russian mafia for more than 30 years. He was profiting from them. They rescued him. They bailed him out.”

Sean Illing

I’m curious about how you collected all of this evidence. Did you go to Russia? Did you interview most — or any — of the people directly involved in these transactions? Did you compile this information yourself or rely on other sources?

Craig Unger

It’s stunning what you can find out through public sources. I did not go to Russia. I had a source who tipped me off to the name Semion Mogilevich, one of the highest-ranking bosses in the Russian mob, whom I had never heard of before, and that led me to a database online that revealed ownership of homes in the state of New York — purchases and sales.

And so I went to Trump properties, and every time I found a Russian name, I would research it, and it was stunning. I’d often take their name, put in Mogilevich in Google, and it was like hitting the jackpot on a slot machine, time after time after time.

There were countless people who were indicted for money laundering, or they were gunned down on Sixth Avenue, and there was just a huge percentage who seemed to have criminal histories, and that sort of got me started. I also had a wonderful research assistant who speaks Russian and she grew up in Brooklyn, and she was a terrific asset and helped break the language barrier for me.

Sean Illing

The subtitle of your book is “The Untold Story of Donald Trump and the Russian Mafia,” but it’s not clear to me which part of the story is new. What did you uncover here that wasn’t previously known?

Craig Unger

The insights I gained from Gen. Kalugin are completely new, but honestly, a lot of what I did was simply compile all this disparate stuff that was out there but had never been pieced together neatly in one place.

For example, a lot of the Russian-connected stories were published in the crime pages of the New York Post or the New York Daily News, but they were always just straight-ahead crime stories you could see in a tabloid. There was no sense that this had any geopolitical implications or forces behind it.

So part of what I tried to do was assemble all of this in a coherent narrative that laid it all out in a comprehensive way. We have all these seemingly random crime episodes that appeared in tabloids again and again, but it turns out that much of it was connected to a much larger operation, one that ended up ensnaring Trump and the people around him.

Sean Illing

Trump is obviously the focus here, but as you mentioned earlier, he’s not the only asset targeted by the Russians. What do we know about Russian efforts to compromise other prominent American figures?

Craig Unger

One of the things I hope this book shows is that there’s a new kind of war going on. It’s a global war without bombs or bullets or boots on the ground, and the weapons are information and data and social media and financial institutions. The Russian mafia is one weapon in this global conflict, and they’ve been fighting it smartly since the fall of the Soviet Union.

The Russians start businesses and front companies and commodities firms that appear legitimate but essentially work to advance the interests of the Russian state. They’re very good at getting people entangled financially and then using that as leverage to get what they want. This appears to be what they’ve done with Trump, and now he’s president of the United States.

Sean Illing

Maybe the most troubling part of all this is that the Russians simply exploited our own corrupt system. They studied America’s pay-for-play culture, found its weak spots, and very carefully manipulated it. As long as our system remains unchanged, we should expect this kind of exploitation.

Craig Unger

Absolutely. There’s an old saying that sometimes the worst part of the scandal is what’s legal, and the Russians, to their credit, studied our system and campaign finance laws and they exploited it masterfully. They’ve used pharmaceutical companies and energy companies and financial institutions to pour money into our politics, and we really have no idea the extent of their influence.

One thing Vladimir Putin got right was his insistence that American democracy is also corrupt, and I think he’s showing us exactly how corrupt it is. Trump is just the most glaring example, but surely there are others, most of which we know nothing about.

Sean Illing

The case you lay out is pretty damning, but I’m left wondering if any of it really matters. As you said, most of this stuff is hiding in plain sight, and although the special counsel investigation is underway, there’s a subset of the country for whom no amount of evidence is enough to persuade them that something wrong has occurred, and Congress has demonstrated its uselessness pretty clearly. So how do you see all this playing out?

Craig Unger

It’s hard to say. I think we’re on a collision course that will either end in impeachment or with Trump reverting to unconstitutional measures to stay in office. That is simply my opinion. However this plays out, it’s clear that we’re in uncharted territory here, and it’s hard to see how this ends well for anyone.